Birmingham-Southern College is a private college in Alabama whose roots in the state trace back more than 160 years. It grew from the 1918 merger of Southern University and Birmingham College — both of which had opened in the mid-1800s.
However, the college has fallen into dire financial straits over the past decade or so, depleting its endowment along the way.
Earlier this year, Alabama lawmakers appeared to throw the institution a lifeline by establishing a loan program for distressed colleges and funding it with $30 million. The college hoped to use the loan as bridge funding while it pursued a $200 million endowment campaign.
But State Treasurer Young Boozer threw a wrench into Birmingham-Southern’s plans when he denied the institution’s loan application in October. Since then, the college’s future has remained in doubt.
Below, we’re keeping track of the latest news about Birmingham-Southern.
This story will be updated with new developments.
Birmingham-Southern’s bid to stay open
2010Birmingham-Southern’s deep financial problems come to light. The college’s president, David Pollick, says the college hadn’t been deducting Pell Grants from student financial aid packages, resulting in the institution giving away too much financial aid. That error had been causing shortfalls of about $5 million annually for years, he says.
Dec. 15, 2022Two Alabama state lawmakers write a letter revealing that without government support, Birmingham-Southern will close after May 2023. The letter notes that the college has been “operating in financial distress for over a decade” and needs one-time funds while it raises private donations to stabilize its budget.
Dec. 17, 2022
Birmingham-Southern publicly announces it is seeking $37.5 million in federal, state, county and city aid. In a public statement, the college says the funding would give it “breathing room” while it attempts to raise $200 million for its endowment fund.
The statement says Birmingham College’s financial problems began years ago, in part because of a building program that “drew heavily upon the endowment.” It also cites the errors in its federal financial aid accounting.
Feb. 8, 2023Alabama lawmakers tell AL.com that it’s unlikely they will pass a bill to bail out Birmingham-Southern.
March 28, 2023A spokesperson for Alabama Gov. Kay Ivey, a Republican, says the state has “no plans” to use taxpayer money to save the college.
April 5, 2023Birmingham-Southern’s trustee board votes to keep the college open. Board Chair Keith Thompson says in a statement that the college has been “working closely with our allies in state and local government to secure bridge funding.”
May 2, 2023Alabama state Sens. J.T. Waggoner, a Republican, and Rodger Smitherman, a Democrat, introduce a bill that would create the Distressed Institutions of Higher Education Revolving Loan Program. The program would provide loans to financially struggling colleges that had been operating for over 50 years in the state and met other conditions.
May 4, 2023
Alabama’s Senate passes the bill to create the loan program for distressed colleges.
May 25, 2023
Alabama’s House also passes the bill.
June 1, 2023
Ivey kicks the bill back to Alabama’s Legislature with a proposed amendment requiring applicants to submit financial restructuring plans documenting how they would repay the loan. Her amendment would also require loan recipients to pay interest.
“I have previously said that taxpayers’ public funds should not be used to bail out a private college, and I remain concerned about the wisdom and propriety of this program,” Ivey writes in a memo to the Legislature.
June 6, 2023
Alabama’s House and Senate both approve the executive amendment.
June 16, 2023Ivey signs the bill into law, setting up a lifeline for Birmingham-Southern.
Aug. 18, 2023Alabama State Treasurer Young Boozer announces he is seeking an opinion on the constitutionality of the loan program from the state’s attorney general.
Aug. 22, 2023Alabama Attorney General Steve Marshall declines to issue an opinion and says he has the responsibility to defend enacted laws from constitutional challenges, according to Alabama Daily News.
Aug. 24, 2023Boozer announces that the loan program is officially open. Birmingham-Southern files its loan application the same day.
Oct. 13, 2023A letter from the state treasurer denies Birmingham-Southern’s loan application. Boozer also tells Birmingham-Southern President Daniel Coleman that the loan was denied during a phone conversation, according to a later statement from the treasurer’s office.
Oct. 18, 2023
Birmingham-Southern sues Alabama’s state treasurer for denying its loan application, with Coleman calling the move “sudden and unwarranted.”
“This followed months of discussions in which the treasurer gave no indication whatsoever that any aspect of BSC’s application was wanting, or that he would not act as the Legislature intended when they wrote and passed the Loan Fund bill,” Coleman said.
In court documents, the college says it is likely to close without emergency relief.
Oct. 25, 2023
Birmingham-Southern announces dismissal of its lawsuit against the state treasurer and says college officials are exploring options, including appealing to the Alabama Supreme Court.
“Our good faith was betrayed over the several months of working with Treasurer Boozer to deliver this bridge loan to the College,” Coleman says in a statement. “The timeline of our interactions clearly demonstrates that his behavior was arbitrary and capricious.”
Oct. 29, 2023
Boozer issues a statement, arguing that Coleman was attempting to “deflect blame and attack” his character.
“I am disappointed with the incendiary rhetoric of President Coleman. He falsely claims that I acted arbitrarily or capriciously, or in bad faith, or misinterpreted the law in question. I did not. President Coleman is wrong,” Boozer says.
Boozer also calls the college a “terrible credit risk.”
Nov. 3, 2023
In a public message, Coleman says college officials are confident they can complete the academic year even after the state loan fell through.
“We will continue to procure funds that will stabilize the College for the long term,” Coleman said. “That includes working with the Alabama Legislature, private donors, and other entities.”